With the price of a barrel of oil dropping 20% in the past month, why has the pump price increased by 20%? Hummmmmm!
The simple answer is that refiners are reducing their output to control the supply of refined petroleum and therefore, the final price of the product. This is outrageous. Cutting back on our consumption does not in and of itself cause the prices to decline. Speculators at the commodities exchanges in the US and abroad really control the price you pay at the pump. Some of the players include the big oil companies, Goldman Sachs, Morgan Stanley and many other entities that have a vested interest in fixing the price of oil artound the world.
Enough is enough. It's time for government to nationalize at least one of the big oil companies to help control prices and to keep the rest of the industry honest. Speculators should not be allowed to own oil contracts unless they actually take possession of the oil they purchase. Right now, only about 20% of those future contracts end up with actual oil being delivered. That's nonsense.
Drive your brains out because no matter what you do, cutting back on consumption only leads to more cuts in the supply chain, be it exploration, extraction or refining.
Based on the current price of a barrel of oil today, the average pump price should be closer to $1.25 than $2.00. We are being charged more than a 50% premium for gas right now.
Write to your congressional representatives and give them a piece of your mind and stay on them like a Chihuahua on a pantleg.
That's my outrage of the day. What's yours?
Thursday, February 12, 2009
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